NEW DELHI, INDIA — The United States (U.S.) Supreme Court rejected an appeal by Indian IT services firm Tata Consultancy Services (TCS) against a $140 million punitive damages order in a trade secrets lawsuit filed by Epic Systems Corp.
In its recent regulatory filing, TCS said the U.S. Supreme Court denied its petition to appeal a lower court decision upholding the $140 million punitive damages award originally passed by a Wisconsin federal district court in 2016.
The legal dispute dates back to 2014 when Wisconsin-based Epic Systems accused TCS of misusing confidential documents and trade secrets while working as a consultant for Epic. A jury initially awarded Epic a $940 million judgment, but appeals courts later reduced that to $140 million in compensatory and punitive damages.
With the U.S. Supreme Court rejecting TCS’s latest appeal, the company “intends to make a balance provision of approximately $125 million” as an exceptional item in its upcoming third-quarter results ending December 2023.
The $125 million provisioning will adversely impact TCS’s net profit for the quarter when it reports earnings in January. TCS shares fell 0.6% on Tuesday following the U.S. Supreme Court decision.
The nearly decade-long legal fight centered around TCS allegedly accessing and misusing Epic’s confidential software system documents and trade secrets. The U.S. Supreme Court ruling ends the matter, though TCS said it “respectfully disagrees” with the decision.